Designing Traditional and Activity-Based Costing for Tax Compliance Activities at the Sukoharjo Primary Tax Service Office

Abstract

Cost information in Indonesian tax administration is generally presented as aggregate budget and expenditure realisation, so the cost of producing a single compliance output remains unknown. This study designs a costing model for tax compliance activities at the Sukoharjo Primary Tax Service Office (KPP) by comparing traditional costing with activity-based costing (ABC). Adopting a constructivist paradigm and a single-case study strategy, the study collected primary data through semi-structured interviews with tax counsellors, Account Representatives, and tax auditors, while secondary data comprised the 2025 budget realisation report, output data, staffing data, and workspace area. The data were analysed thematically to map the business processes and quantitatively to construct both costing models. The findings show that the three compliance activities, namely tax education, supervision through SP2DK, and audit leading to the issuance of tax assessment letters, consume resources in markedly different patterns. From a total cost of IDR 2,130,781,062, traditional costing yields unit costs of IDR 3,816,899, IDR 1,171,994, and IDR 218,149, whereas ABC yields IDR 2,685,667, IDR 681,682, and IDR 400,704, respectively. Traditional costing therefore overcosts education by 42.1 percent and SP2DK by 71.9 percent, but undercosts tax assessment letters by 45.6 percent. Practically, the proposed two-pool ABC model provides tax offices with a fairer basis for evaluating the cost efficiency of each compliance service.